The Five Flash Points of the Long-Simmering Obama-Warren Feud

Their recent fight over the Trans-Pacific Partnership is the latest episode in their up-and-down relationship.

President Obama leans in to kiss Senator Elizabeth Warren after making a statement in the State Dining Room of the White House July 17, 2013 in Washington, D.C.
National Journal
May 12, 2015, 1 a.m.

Pres­id­ent Barack Obama and Sen. Eliza­beth War­ren should have a lot in com­mon. Both are re­l­at­ively wonky former law pro­fess­ors who can be averse to the polit­ic­al press. Obama was seen as a pro­gress­ive al­tern­at­ive to Hil­lary Clin­ton in 2008, and, des­pite her con­stant re­buffs, the Left des­per­ately wants War­ren to oc­cupy that same space today.

But since Obama took the White House, the two have fre­quently clashed on eco­nom­ic is­sues, with the 12-na­tion Trans-Pa­cific Part­ner­ship free-trade deal be­ing the latest ten­sion point. Here is a look back on five times that feuds between War­ren and the White House have spilled out in­to the open.

The Bail­out of the Banks and Tim Geithner

After the fin­an­cial crisis of 2008, War­ren, then a pro­fess­or at Har­vard Law School, be­came the chair­wo­man of the Con­gres­sion­al Over­sight Pan­el, which would be able to re­view ac­tions taken by the Treas­ury De­part­ment dur­ing the bank bail­out.

(RE­LATED: White House Hits Back at Eliza­beth War­ren: ‘There’s No Need for This False Cri­ti­cism’)

Dur­ing that time, War­ren be­came a fre­quent ant­ag­on­ist of Obama’s first treas­ury sec­ret­ary, Tim Geithner. While Geithner nev­er worked for Wall Street be­fore his time as a Cab­in­et of­fi­cial, he was of­ten per­ceived by pro­gress­ives as be­ing too friendly to the fin­an­cial in­dustry and was head of the New York Fed­er­al Re­serve dur­ing the fin­an­cial crisis.

In one hear­ing in 2009, War­ren grilled Geithner about what she felt were dif­fer­ing stand­ards for the con­di­tions of the U.S. auto­mobile-in­dustry bail­out as op­posed to more lax stand­ards for fin­an­cial in­sti­tu­tions that re­ceived bail­out money.

“You’re say­ing there have been changes in man­age­ment?” War­ren asked about fin­an­cial in­sti­tu­tions, to which Geithner re­spon­ded, there were changes at Amer­ic­an In­ter­na­tion­al Group as well as at Fan­nie Mae and Fred­die Mac.

“I am ask­ing about the banks,” War­ren re­spon­ded.

(RE­LATED: Eliza­beth War­ren Wel­comes Wall Street’s Hatred)

“Go­ing for­ward, where in­sti­tu­tions need ex­cep­tion­al levels of as­sist­ance, we will make sure that as­sist­ance comes with con­di­tions that provide for the ne­ces­sary de­gree of ac­count­ab­il­ity, help en­sure these firms emerge stronger rather than weak­er,” Geithner said.

In an­oth­er hear­ing, War­ren probed Geithner about where the money AIG re­ceived from the bail­out in Fed­er­al Re­serve loans went.

“Was Treas­ury aware of who the coun­ter­parties were that were go­ing to re­ceive pay­ment in full on the cred­it-de­fault swaps when $170 bil­lion went to AIG?” War­ren asked.

“They could have known,” Geithner re­spon­ded. “Wheth­er they knew at the time, I’m not sure they knew.”

(RE­LATED: Forever Ready for Eliza­beth War­ren)

AIG re­vealed the com­pan­ies that the com­pan­ies that re­ceived pay­ments from AIG were Gold­man Sachs, Mer­rill Lynch, Cit­ig­roup, and Bank of Amer­ica.

The ap­proach in War­ren’s ques­tion­ing dur­ing this time would largely set the tone for War­ren’s fu­ture feuds with the White House on the premise that it was be­ing too friendly to Wall Street.

Geithner, for his part, did not seem amused by War­ren, writ­ing in his mem­oir, “Her [bail­out] over­sight hear­ings of­ten felt more like made-for-You­Tube in­quis­i­tions than ser­i­ous in­quir­ies.” He called his re­la­tion­ship with War­ren “com­plic­ated.”

Dodd-Frank and the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau

The Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, which was es­tab­lished un­der Dodd-Frank, is of­ten con­sidered a brainchild of War­ren’s. But Geithner wrote in his mem­oir that he be­lieved War­ren would face tough Sen­ate op­pos­i­tion to be head of the agency from Re­pub­lic­ans and some mod­er­ate Demo­crats wary of War­ren. “At a meet­ing with Rahm and Valer­ie, I told the group that if the Pres­id­ent wanted to ap­point War­ren to run the CFPB, I wouldn’t try to talk him out of it,” he wrote “but every­one in the room knew she had no chance of be­ing con­firmed.”

“They didn’t want to vote for a con­tro­ver­sial lib­er­al at a con­ser­vat­ive mo­ment,” he wrote. “They were also wor­ried about the in­tense op­pos­i­tion in the busi­ness com­munity.”

War­ren faced stiff op­pos­i­tion for CFPB from then-White House Chief of Staff Rahm Emanuel, who in­formed Sen. Harry Re­id that “We don’t like her, either,” when a mod­er­ate Demo­crat­ic sen­at­or said he was con­cerned about who would head the agency.

(RE­LATED: Hil­lary Clin­ton Sings Eliza­beth War­ren’s Praises in ‘Time 100’)

War­ren, after help­ing over­see the agency’s cre­ation, ul­ti­mately was passed over for the po­s­i­tion, and the bur­eau was headed by Richard Cordray, though it turned out Cordray would also face fierce con­gres­sion­al op­pos­i­tion.

Larry Sum­mers and the Fed­er­al Re­serve

In his mem­oir, former Obama ad­viser Dav­id Axel­rod wrote that Emanuel as­sured Larry Sum­mers “that he would suc­ceed Ben Bernanke as chair of the Fed­er­al Re­serve when Bernanke’s term ex­pired in 2010.” Obama ini­tially re­appoin­ted Bernanke in 2010. But in 2013, when the idea of Sum­mers be­com­ing chair­man was floated, War­ren op­posed it.

(RE­LATED: Eliza­beth War­ren Slams Big Oil, Says Ma­jor Com­pan­ies Profit From Pol­lu­tion)

A 2013 piece in The Bo­ston Globe showed War­ren and Sum­mers had been split in their views of fin­an­cial reg­u­la­tion, with War­ren largely sup­port­ing the res­tor­a­tion of the Glass-Steagall Act, which sep­ar­ated com­mer­cial and in­vest­ment bank­ing, and whose re­peal Sum­mers over­saw dur­ing the Clin­ton ad­min­is­tra­tion.

Like the rest of the Obama team, Sum­mers’s re­la­tion­ship with War­ren has been com­plic­ated, with Sum­mers serving as pres­id­ent of Har­vard around the same time War­ren was a pro­fess­or there. Sum­mers was also an early sup­port­er of the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, though he punted on wheth­er she should be head the agency, say­ing, she “is one of the people who would be a ter­rif­ic can­did­ate.”

Sum­mers tried reach­ing out to the Mas­sachu­setts Demo­crat when he was vy­ing to be­come head of the Fed. Ul­ti­mately, War­ren wound up sign­ing a let­ter by Sen. Sher­rod Brown, also seen as a crit­ic of Wall Street, to the White House back­ing Janet Yel­len for the chair­man­ship. Yel­len even­tu­ally won out.

Ant­o­nio Weiss

In Novem­ber, Obama nom­in­ated Ant­o­nio Weiss, glob­al head of in­vest­ment bank­ing for Laz­ard, to be­come un­der­sec­ret­ary for do­mest­ic fin­ance at the Treas­ury De­part­ment. But what should have been a non­con­tro­ver­sial nom­in­a­tion for a low-pro­file job be­came the next is­sue to get in War­ren’s crosshairs.

(RE­LATED: Eliza­beth War­ren Strikes Back at Obama For Call­ing Her ‘Wrong’ On Trade)

War­ren lam­basted Weiss for his in­volve­ment in a cor­por­ate-tax in­ver­sion deal in­volving Bur­ger King buy­ing a Ca­na­dian cof­fee out­let, al­low­ing it to move its tax ad­dress to Canada.

War­ren also cri­ti­cized the ap­point­ment of Weiss on the grounds that it was an­oth­er ex­ample of the con­tinu­ing trend of people mov­ing between Wash­ing­ton and Wall Street.

“This is just one spin of the re­volving door too many,” War­ren said, also say­ing that Weiss was not suf­fi­ciently qual­i­fied.

Ul­ti­mately, Weiss pulled out of his nom­in­a­tion, which al­lowed War­ren to claim a sig­ni­fic­ant polit­ic­al win at the ex­pense of the White House. Weiss in­stead be­came a coun­selor to the treas­ury sec­ret­ary, with re­portedly pro­nounced in­flu­ence.

The Trans-Pa­cific Part­ner­ship and TPA

The latest chapter of Obama and War­ren’s on-again/off-again feud comes in the form of the Trans-Pa­cific Part­ner­ship. In Feb­ru­ary, War­ren wrote an op-ed in The Wash­ing­ton Post cri­ti­ciz­ing a pro­vi­sion in the trade deal known as In­vestor-State Dis­pute Set­tle­ments, which she said could lead to for­eign in­vestors be­ing able to sue for­eign gov­ern­ments in coun­tries where they in­vest. War­ren has warned this could lead to a weak­en­ing of labor and en­vir­on­ment­al rules.

In turn, the White House has tried re­spond­ing by say­ing it would pro­mote strong safe­guards and high­er stand­ards in the pro­vi­sion and called the trade deal “the most pro­gress­ive trade agree­ment in our his­tory,” com­par­ing op­pos­i­tion to it by pro­gress­ives to former Alaska Gov. Sarah Pal­in’s ac­cus­a­tions of “death pan­els” dur­ing the Obama­care de­bate.

But War­ren has con­tin­ued her cri­ti­cism. Last week, dur­ing a speech at the In­sti­tute for New Eco­nom­ic Think­ing, War­ren hit the White House for want­ing Trade Pro­mo­tion Au­thor­ity, which would sub­ject trade deals like TPP to an up-or-down vote without the abil­ity to amend, say­ing a fu­ture Re­pub­lic­an pres­id­ent could use it to dis­mantle Dodd-Frank.

In turn, Obama called War­ren “ab­so­lutely wrong” on trade and on the TPP’s In­vestor-State Dis­pute Set­tle­ment pro­vi­sion in an in­ter­view with Ya­hoo Polit­ics.

“There is no evid­ence that this could ever be used in this way,” Obama said, draw­ing on their mu­tu­al ex­per­i­ence as law-school pro­fess­ors. “One of the things you do as a law pro­fess­or is you spin out hy­po­thet­ic­als and this is all hy­po­thet­ic­al.”

Obama also sniped at War­ren, call­ing her “a politi­cian just like every­body else, and she’s got a voice that she wants to get out there,” be­fore not­ing, on most is­sues, “she and I deeply agree.”

But War­ren re­spon­ded in an in­ter­view pub­lished Monday with The Wash­ing­ton Post, say­ing, “If the pres­id­ent has changed ISDS to solve the prob­lem, then the text should be re­leased so that leg­al ex­perts can look at it.”

It is no co­in­cid­ence that most of War­ren and Obama’s dis­putes have centered around Wall Street and eco­nom­ic policy. Obama was elec­ted shortly after a num­ber of the coun­try’s top fin­an­cial in­sti­tu­tions crashed and sold him­self as someone fight­ing for fair­ness. War­ren’s cri­tique chal­lenges that nar­rat­ive and paints him as hir­ing ad­visers close to the wealth­i­est in­dus­tries and im­ple­ment­ing policies that em­bolden Wall Street.

There is evid­ence War­ren’s voice is win­ning. Many Demo­crats now run­ning for high­er of­fice are op­pos­ing the TPP, which not only could sink the trade deal, but ser­i­ously dam­age Obama’s im­age among lib­er­als as someone who fights for shared prosper­ity, and it could al­low War­ren to take over that mantle even more than she already has.

Cor­rec­tion: A pre­vi­ous ver­sion of this story mis­stated Timothy Geithner’s po­s­i­tion on wheth­er War­ren should head the CFPB after it was es­tab­lished. This story has also been up­dated to re­flect Ant­o­nio Weiss’ role at Treas­ury.

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